On Wednesday, Jim Cramer, the host of Mad Money, shared his thoughts on the volatile trading day, pointing out that President Donald Trump’s actions are reshaping how investors assess stocks. Cramer highlighted that before Trump came into the office, his method of evaluating a stock was looking at its price, earnings, revenues, and gross margins.
“Now, though, I start with a simple question: Can President Trump hurt the stock? Can he damage it with an offhanded comment? Can he crush it in anger? And most important, does the price-to-earnings multiple make sense in this new world in light of the president’s love of tariffs and total hostility to the way this country’s been running the past, not to mention many of our country’s friends?”
READ ALSO: 10 Stocks on Jim Cramer’s Radar and Jim Cramer and Analysts Like These 10 Stocks
Cramer specifically pointed to the automotive industry as a significant example of how Trump’s approach to trade has shifted the dynamics of the market. He recalled how the North American Free Trade Agreement (NAFTA) was originally created, partly to protect the U.S. auto industry from the influx of low-cost imports from countries like Japan and South Korea.
“Without NAFTA, auto companies couldn’t compete against the flood of imports from Japan and South Korea, which only have a 2.5% tariff on them. The tariffs President Trump slapped on American companies that import products from Mexico or Canada, 10 times that.”
Cramer also acknowledged that the recent pause in tariffs for the auto industry caused a brief surge in market activity, which led to some unpredictability in stock movements. However, he noted that if automakers are forced to either pay the hefty tariffs or shift their production to the U.S., replacing inexpensive labor in Mexico with higher-cost union labor, their earnings could face a sharp decline. Cramer speculated that such a scenario could result in a significant cut in earnings, though he hoped the impact would not be as severe.
“Here’s the bottom line: This market is fiercely trying to revalue stocks because of the president’s comments. And we do it day after day after day because he’s always making so much news. So it’s been doing a poor job and that’s created a ton of opportunities for you to both buy and sell and I say you take them right away.”
Our Methodology
For this article, we compiled a list of 11 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 5. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Jim Cramer Looked At These 11 Stocks Recently
11. Shift4 Payments, Inc. (NYSE:FOUR)
Number of Hedge Fund Holders: 38
A caller asked Cramer’s thoughts on Shift4 Payments, Inc. (NYSE:FOUR) and his answer was:
“Yeah, you know, people didn’t like that last quarter. I, I agree with you… I think it’s a remarkable company. It’s just that the payment space is very crowded. Go ask PayPal. So you, what you’re, what you’re hoping for is that the payment space gets less crowded, less crowded. I don’t know if it can do that. So it’s a tough space.”
Shift4 Payments (NYSE:FOUR) offers a variety of payment processing and software solutions, including a platform for omnichannel card acceptance, mobile wallets, and alternative payment methods. It also provides technology tools such as POS systems, business intelligence software, and e-commerce platforms for managing sales, inventory, and customer engagement. Interestingly enough, in November 2023, Cramer commented:
“Now there are so many companies that take care of payments and when interest rates were going higher, the market hated every one of them. But when rates go lower, we’re suddenly enamored to… what feels like a totally homogenized group of stocks. Even as the one company has shown a great flare and that is Shift4 Payments. Yeah, Shift4 Payments, up nearly 48% for November. How do you like that? Shift4 Payments.”
10. RTX Corporation (NYSE:RTX)
Number of Hedge Fund Holders: 80
RTX Corporation (NYSE:RTX) provides a wide range of systems and services for commercial, military, and government sectors, focusing on aircraft engines, aerospace technologies, and advanced threat detection capabilities. When Cramer was asked about the stock, he said, “You are buying it right. Keep it. It’s a fantastic stock. I wish I owned it for my Charitable Trust.”
Longleaf Partners Fund stated the following regarding RTX Corporation (NYSE:RTX) in its Q4 2024 investor letter:
“RTX Corporation (NYSE:RTX) – Aerospace and defense company RTX was a top contributor for the year. Our appraisal value has grown nicely since we first purchased the company just over a year ago. While the issues for Pratt & Whitney’s (P&W) Geared Turbofan engine are still not yet fully fixed, they have gotten better and given us another reminder that the point of maximum pessimism is only obvious in retrospect. We continue to have a conservative valuation on P&W so view this as a source of future value upside. The Raytheon segment has also performed better as the year has gone on, with recent signs of margin improvement. Strong industry tailwinds, prudent capital allocation and a solid balance sheet provide a foundation for sustained growth and eventual full value recognition.”
